During Monday trading hours in the US stock market,$GameStop (GME.US)$its growth narrowed to 14%, hitting a daily low of $26.40. GME had doubled during pre-market trading with a maximum increase of 75%. At the close of Monday, GME increased by 21%, closing at $28.
The reason behind GME's surge on Monday is that 'the leading retail investor' Keith Gill is back. Gill's nickname on Reddit is DeepF-Value, and Roaring Kitty on YouTube and X.
Roaring Kitty posted a screenshot of a delivery order on his Reddit account 'DeepF-Value' on Sunday. The screenshot shows that he bought 5 million shares of GameStop stock for $21.27 per share, worth a total of $115.7 million. In addition, he bought 120,000 call options with a strike price of $20, which will expire on June 21st, with a total value of approximately $65.7 million.
However, two pieces of news during Monday's afternoon trading caused GME's mid-day surge to shrink significantly, which is the stock price trend mentioned at the beginning of this article:
According to media reports, E-Trade, the brokerage firm under Morgan Stanley, is considering banning 'the leading retail investor' Keith Gill from using its platform for trading. Internal discussions are taking place because of concerns over potential market manipulation.
In addition, the US Securities and Exchange Commission (SEC) is investigating some of the call option trades. Those trades took place before and after Gill posted on social media platforms.
Although GME's stock price experienced a roller coaster on Monday, Gill remained unfazed. He updated his holdings on the Reddit platform after the close of Monday's US stock market, just like during the 2021 retail short squeeze battle. The screenshot shows that his GME stocks and options holdings are the same as Sunday. Gill's latest post was published soon after media reports on E-Trade's consideration of banning his trading.
At the close of Monday, Gill had a floating profit of $33.62 million in the GME stock portion, with a profit percentage of 31.62%, and $51.83 million in the GME options portion, with a profit percentage of 76.04%. In fact, Gill's floating profit in the morning was much larger, but he did not cash out.
After Gill posted the screenshot on Monday's post-market trading, GME surged, with an increase of up to 4%.
In addition to the original 'leading retail investor,' Andrew Left, the founder of the well-known Citron Research company, has returned to the GME stage. In the 2021 retail short squeeze battle, Left failed his short position in GME, and this time he has returned to short GME again. Regarding Gill's posts on Reddit, he said, 'I shorted after seeing the post.'
In fact, Left announced that he would short GME's stock in May. He also said, 'I have closed my short position in May, and I have shorted again today.' Left also revealed that his new position is smaller than his previous position, but he did not give a specific size.
The GME frenzy since May is almost entirely due to Gill's influence. Regarding Gill's powerful influence, Left exclaimed, 'He can completely be a hedge fund manager.'
The 2021 retail short squeeze battle caused Citron to suffer heavy losses, and Left even announced that his company will no longer publish short research, ending a 20-year practice. Although he has returned to publish such research, the frequency has significantly decreased.
'I have no malice toward this company. It is not even a company, it is a trading tool,' said Left.
Well-known investor Duan Yongping also shared his participation in this round of GME trading on Xueqiu. Unlike directly shorting the stock, Duan Yongping's trading is obviously more conservative and safe. He sold call options with a high strike price of $100, and the options expire on January 17, 2025.
In other words, this round of GME's crazy surge will continue, or intermittently continue until early next year, and exceed $100 to trigger Duan Yongping's options. GME needs to reach approximately $105 or higher for Duan Yongping to lose money.
Edited by Jeffrey